China is toughening supervision on the banking and insurance sector with solid progress made in the first quarter of the year, reports the Xinhua news agency citing a statement by the China Banking and Insurance Regulatory Commission (CBIRC).

"All forms of violations have been seriously inhibited to forestall systemic financial risks," said the online statement posted last Friday.

Banking and insurance institutions received 646 penalties in the first three months of the year during a campaign against violations including defective corporate governance and breaches of macro-regulation policies, it said.

The errant institutions were handed fines and confiscation orders totalling about CNY1.1 billion (US184 million), and another 798 penalties were imposed on individuals with fines amounting to CNY28.6 million, the CBIRC says.

Major risks have been dealt with promptly, and prominent cases in the financial sector have been investigated and punished strictly, including the official takeover of Anbang Insurance, the CBIRC says.

Disclosure of these cases send timely warning signals to the whole industry, as regulators maintain a tough stance and long-term deterrence on violations of laws and regulations, it says.

Tougher supervision and punishment have led to significant strengthening of risk management and compliance awareness in the banking and insurance institutions, and brought much better order to the market, the regulator adds.

China announced a merger of the banking and insurance regulators in March in an effort to tighten cross sector scrutiny. The CBIRC was officially inaugurated on 8 April.